Toshiba Facing Fresh Demand For Damages

Japanese electronics giant Toshiba says it is facing a fresh lawsuit from another group of foreign investors seeking damages following its $1.2bn accounting scandal.

The company says it has now been served with 26 complaints in total, demanding nearly $1bn in compensation.

Last month, Toshiba warned it could collapse because of soaring losses.

Originally known for its consumer electronics products, Toshiba has faced a series of difficulties.

An accounting scandal, uncovered in 2015, led to the resignation of several members of the firm’s senior management, including the chief executive, after the company was found to have inflated the previous seven years’ profits by $1.2bn.

Toshiba said it received the most recent complaint, demanding $399m in compensation, on Monday. It had been filed on 3 April with the District Court in Tokyo by 70 shareholders, foreign institutional investors and individuals.

The company said it had received prior warning from some of the shareholders that the action would be brought.

As a result, part of the impact of this latest claim for damages was reflected in the financial outlook Toshiba published last month, when it warned it was likely to report an annual loss of 950bn yen ($8.4bn; £6.5bn).

Toshiba’s problems are not confirmed to the accounting scandal. Its problems came to a head again in January this year, when it became clear its US nuclear unit, Westinghouse, was in financial trouble.

Westinghouse subsequently filed for US bankruptcy protection. It had been hit by bit losses having suffered huge cost overruns at two projects in Georgia and South Carolina.

Toshiba’s troubles

Feb 2006: The Japanese giant, famous for consumer electronics, buys US nuclear firm Westinghouse

Mar 2011: The Fukushima disaster makes nuclear power a much harder sell around the globe

Jun 2015: Toshiba is found to have inflated its financial results by $1.2bn over the previous seven years

Dec 2016: The company warns that its Westinghouse subsidiary is set to lose $4.3bn. Toshiba’s share price falls by more than 40% over three days

Jan 2017: Toshiba says the unit that makes memory chips for smartphones and computers – NAND – will be split off so it can sell a slice to raise funds

Feb 2017: Toshiba delays reporting its Q3 earnings (Oct-Dec 2016). Chairman Shigenori Shiga resigns. And the company says it will take a $6.3bn hit due to losses at its US nuclear unit

Mar 2017: The company misses a second scheduled date for filing its Q3 results. Westinghouse files for Chapter 11 bankruptcy protection

Apr 2017: Toshiba finally puts out its Q3 results, without the stamp of approval from its auditors, with a warning that its future may be in jeopardy

May 2017: The firm misses a deadline to publish results for the year to March 2017 but estimates losses will be 950bn yen ($8.4bn; £6.5bn).